Gold Price Outlook Analysis: Why is the 2025 Gold Trend Forecast Gaining Market Attention?

In the final quarter of 2024, gold has become the most discussed asset among global investors. From the beginning of the year until now, gold prices have surged to their highest level in nearly 30 years, prompting many to ask the same question: How long can this rally continue? Is it too late to enter now?

To answer this question, we first need to understand the logic behind the current gold price surge.

The Truth Behind the Gold Price Skyrocketing / Surge: Three Core Drivers

Tariff disputes boost risk aversion sentiment

This year’s most notable macro event is the uncertainty in trade policies. Ongoing policy risks have intensified, leading to a significant increase in market risk aversion demand. Based on historical experience, during policy shocks (such as the 2018 US-China trade friction), gold typically experiences a short-term increase of 5–10%. This time is no exception; the higher the uncertainty, the stronger the demand for gold from buyers.

Federal Reserve rate cut expectations influence gold prices

This is key to understanding gold trends. Rate cuts weaken the US dollar and reduce the opportunity cost of holding gold. More importantly, real interest rates and gold prices have an inverse relationship—the lower the interest rates, the more attractive gold becomes.

According to CME interest rate tools, the probability of the Federal Reserve cutting interest rates by 25 basis points at the December meeting is as high as 84.7%. Such expectations are enough to drive continuous capital inflows into the gold market.

Global central banks continue to increase gold reserves

Data from the World Gold Council shows that in the first three quarters of 2025, global central banks net purchased 220 tons of gold, a 28% increase quarter-over-quarter. To date, about 634 tons of gold have been accumulated. Notably, 76% of central banks plan to increase their gold reserves over the next five years, while also expecting the US dollar reserve ratio to decline. This reflects a gradually diminishing confidence in the US dollar among countries.

Why is gold prices climbing all the way up? The complete picture

Besides the three main drivers above, other factors also support the upward trend of gold:

The global debt scale has reached $307 trillion, and high debt levels limit countries’ policy space. Monetary policies tend to remain accommodative, directly suppressing real interest rates and providing long-term support for gold.

Diminishing confidence in the US dollar is equally important. When the dollar faces depreciation pressure or market confidence wavers, gold priced in dollars benefits accordingly.

Geopolitical uncertainties—such as the ongoing Russia-Ukraine conflict and tense Middle East situations—continue to boost risk aversion demand, often causing short-term volatility.

It is also worth noting that media and community hype play a role. Continuous reporting and social sentiment amplification attract large amounts of short-term capital, causing consecutive rises. However, these short-term factors usually only determine the magnitude of volatility, not the long-term trend.

How do market leaders view the 2025 gold trend forecast?

Although recent gold prices have experienced adjustments, mainstream institutions remain optimistic about its outlook:

J.P. Morgan Commodity Team considers the current correction a “healthy adjustment,” raising the Q4 2026 target price to $5,055 per ounce.

Goldman Sachs maintains a target price of $4,900 per ounce by the end of 2026.

Bank of America is more aggressive, raising the 2026 target price to $5,000, with strategists even hinting that gold could break $6,000 next year.

Jewelry retail also confirms this—brands like Chow Tai Fook and Luk Fook Jewelry still reference prices for pure gold jewelry above 1,100 TWD/gram, with no obvious decline.

Different investors’ strategies for gold trend forecasts

If you are a short-term trader

The current volatility provides excellent opportunities for short-term operations. Liquidity is ample, and the logic of price movements is relatively clear. Especially during sharp surges or drops, the bullish and bearish forces are easily discernible. Experienced traders can seize these opportunities easily.

But if you are a beginner, be sure to test the waters with small amounts and avoid blindly increasing positions. Once your mindset collapses, the risk of losing everything is very high. Using economic calendars to track US economic data releases can significantly improve trading success rates.

If you want to hold physical gold

Be prepared for significant fluctuations. Gold’s annual volatility reaches 19.4%, higher than the S&P 500’s 14.7%. Moreover, gold’s cycle is extremely long; it takes more than 10 years to verify long-term returns. During this process, prices can double or be cut in half.

Transaction costs for physical gold are also not low, usually between 5% - 20%, which should be factored into your cost considerations.

If you want to allocate gold in your portfolio

Of course, you can, but don’t put all your eggs in one basket. Gold’s volatility is not lower than stocks; diversification remains the prudent strategy.

If you want to maximize returns

Consider combining long-term holding with short-term trading. Especially around US economic data releases, volatility often expands significantly, offering maximum profit potential for short-term operations. However, this requires some experience and risk management skills.

Final risk warning

No matter how you forecast the 2025 gold trend, a few points must be remembered:

Gold is not an investment that only rises. Although long-term supporting factors still exist, short-term corrections can be sudden and unexpected.

For Taiwan investors, the USD/TWD exchange rate fluctuations also need to be considered, as they can significantly impact final returns.

Don’t blindly follow others just because they are making money. This gold rally is not over, but whether medium-long term or short-term, all strategies should be based on rational analysis rather than emotional impulses.